Goldman Sachs
GS
$1065.22
-2.76%
Goldman Sachs is a leading global investment bank, providing merger and acquisition advisory, trading, lending, asset management, and wealth management services. Founded in 1869, it has been the top-ranked M&A advisor by revenue for 20 years and is expanding into stable fee-based businesses like asset and wealth management, which now comprise roughly 30% of post-provision revenue. The current investor narrative centers on Goldman's strong earnings momentum, driven by robust investment banking and trading revenues, while the stock has rallied to near all-time highs amid broader market optimism and a shift toward fee-based income streams.…
GS
Goldman Sachs
$1065.22
Related headlines
Investment Opinion: Should I buy GS Today?
Rating: Hold. Goldman Sachs is a high-quality franchise with strong earnings momentum, but the stock's proximity to all-time highs and cautious analyst consensus suggest limited near-term upside. The average analyst target of $1,090 implies -5.4% downside, supporting a neutral stance. Supporting Evidence: Revenue grew 22.9% YoY to $38.4B, gross margin expanded to 52.7% from 45.4%, operating margin rose to 30.0% from 15.9%, and the PEG ratio of 0.65 suggests undervaluation relative to growth. However, the trailing P/E of 16.9x is near the middle of its 5-year range (6x-26x), indicating fair valuation. Risks & Conditions: The biggest risks are negative free cash flow (-$41.9B TTM) and high debt-to-equity (4.88). This Hold would upgrade to Buy if the stock pulls back to $1,000 (approx. 13% downside) or if free cash flow turns positive. It would downgrade to Sell if revenue growth decelerates below 10% or if the Fed's rate hikes cause a sustained market downturn. Overall, GS is fairly valued relative to its history and peers, with a slight premium justified by its dominant market position.
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GS 12-Month Price Forecast
Goldman Sachs exhibits strong fundamental momentum with accelerating revenue and expanding margins, but the stock's valuation near all-time highs and negative free cash flow warrant caution. The base case of moderate growth and stable valuation is most likely, with a 50% probability. The bull case requires sustained market exuberance, while the bear case hinges on a macro downturn. I would upgrade to bullish if free cash flow turns positive or if the stock pulls back to $1,000, and downgrade to bearish if revenue growth falls below 10%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Goldman Sachs's 12-month outlook, with a consensus price target around $1090.10 and implied upside of +2.3% versus the current price.
Average Target
$1090.10
0 analysts
Implied Upside
+2.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$730 - $1325
Analyst target range
Goldman Sachs is covered by 20 analysts, with a consensus recommendation of 'hold' (mean rating 2.68 on a 1-5 scale where 1 is strong buy). The average target price is $1,090.10, implying a -5.4% downside from the current price of $1,152.07. The distribution shows 4 buy-equivalent ratings, 8 hold-equivalent, and 1 underperform, indicating a cautious stance. The target range spans from a low of $730.00 to a high of $1,325.00. The high target of $1,325 assumes continued strong performance in investment banking and trading, while the low target of $730 reflects risks from a potential downturn in capital markets or regulatory headwinds. Recent ratings actions include upgrades from Barclays (Overweight) and Wells Fargo (Overweight), while Oppenheimer downgraded to Underperform. The wide spread between low and high targets ($595) signals high uncertainty about the stock's future direction.
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Bulls vs Bears: GS Investment Factors
Goldman Sachs presents a mixed picture: strong revenue growth and margin expansion are offset by negative free cash flow and a stock price near all-time highs. The bull case rests on continued earnings momentum and a low PEG ratio, while the bear case highlights elevated debt and cautious analyst sentiment. The single most important tension is whether the strong earnings growth can persist and justify the current valuation, or if a slowdown in capital markets activity will trigger a re-rating. Currently, the bull case has slightly stronger evidence given the accelerating revenue and margin trends, but the risk of a pullback from near-term highs tempers enthusiasm.
Bullish
- Strong Revenue Growth: Revenue grew 22.9% YoY to $38.4B in Q2 2026, driven by Global Markets ($20.6B) and Investment Management ($9.2B). This acceleration from Q1's $17.2B shows strong momentum.
- Expanding Profit Margins: Gross margin improved to 52.7% from 45.4% a year ago, and operating margin expanded to 30.0% from 15.9%. This demonstrates significant operating leverage.
- Attractive PEG Ratio: With a PEG ratio of 0.65, the stock appears undervalued relative to its earnings growth. A PEG below 1.0 typically signals undervaluation.
- Dominant Market Position: Goldman has been the top-ranked M&A advisor by revenue for 20 years. Its expansion into fee-based asset/wealth management (30% of revenue) provides stability.
Bearish
- Negative Free Cash Flow: Trailing twelve-month free cash flow is -$41.9B, primarily due to working capital swings in trading. This raises concerns about cash generation sustainability.
- High Debt-to-Equity Ratio: Debt-to-equity of 4.88 is elevated, typical for investment banks but still a risk if credit markets tighten. Interest expense of $18.1B in Q2 2026 is substantial.
- Stock Near All-Time High: At $1,152.07, the stock is at 99.8% of its 52-week high of $1,153.99. The average analyst target of $1,090 implies -5.4% downside, suggesting limited near-term upside.
- Analyst Consensus Hold: With a mean rating of 2.68 (hold) and only 4 buy ratings out of 20 analysts, Wall Street is cautious. The wide target range ($730-$1,325) indicates high uncertainty.
GS Technical Analysis
Goldman Sachs is in a sustained uptrend, with the stock up 64.0% over the past year, significantly outperforming the S&P 500's 20.9% gain. The current price of $1,152.07 sits at 99.8% of its 52-week range ($691.30 - $1,153.99), indicating the stock is near its highs and reflecting strong momentum, though it also suggests potential overextension in the near term. Short-term momentum is accelerating: the 1-month return is +7.1% and the 3-month return is +28.0%, both outpacing the S&P 500's 0.6% and 6.3% gains, respectively. This acceleration aligns with the longer-term uptrend, signaling continued bullish conviction rather than a divergence. The stock's beta of 1.29 indicates it is 29% more volatile than the market, amplifying both upside and downside moves. Key support lies at the 52-week low of $691.30, while resistance is at the 52-week high of $1,153.99. A breakout above $1,154 would signal a new all-time high and likely attract further buying, while a breakdown below recent support near $1,000 could indicate a trend reversal.
Beta
1.29
1.29x market volatility
Max Drawdown
-19.8%
Largest decline past year
52-Week Range
$692-$1154
Price range past year
Annual Return
+50.9%
Cumulative gain past year
| Period | GS Return | S&P 500 |
|---|---|---|
| 1m | -3.1% | +0.3% |
| 3m | +15.0% | +4.7% |
| 6m | +10.7% | +7.5% |
| 1y | +50.9% | +18.4% |
| ytd | +16.5% | +9.0% |
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GS Fundamental Analysis
Goldman Sachs reported Q2 2026 revenue of $38.4 billion, up 22.9% year-over-year, driven by strong performance in Global Markets ($20.6 billion) and Investment Management ($9.2 billion). Revenue has grown sequentially from $17.2 billion in Q1 2026 to $38.4 billion in Q2, reflecting a sharp acceleration in the second quarter. The company is highly profitable, with Q2 2026 net income of $6.6 billion and EPS of $21.27, up from $3.7 billion and $11.07 in the year-ago quarter. Gross margin improved to 52.7% from 45.4% a year earlier, while operating margin expanded to 30.0% from 15.9%, indicating strong operating leverage. Goldman's balance sheet shows a debt-to-equity ratio of 4.88, which is elevated but typical for investment banks. Free cash flow was negative $41.9 billion over the trailing twelve months, primarily due to working capital swings in the trading book, but the company maintains a strong liquidity position with $179.5 billion in cash at the end of Q1 2026. ROE stands at 13.7%, reflecting solid returns on equity.
Quarterly Revenue
$38.4B
2026-06
Revenue YoY Growth
+22.9%
YoY Comparison
Gross Margin
52.7%
Latest Quarter
Free Cash Flow
$-41.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is GS Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. Goldman's trailing P/E is 16.9x, while the forward P/E is 16.3x, implying modest earnings growth expectations. The gap between trailing and forward P/E is narrow, suggesting the market expects stable earnings. Compared to the industry average (not provided, but typically for capital markets firms around 15x), Goldman's P/E of 16.9x is at a slight premium, likely justified by its dominant market position and strong earnings growth. Historically, Goldman's trailing P/E has ranged from roughly 6x to 26x over the past five years. The current 16.9x is near the middle of that range, indicating the stock is neither overvalued nor undervalued relative to its own history. The PEG ratio of 0.65 suggests the stock is undervalued relative to its growth rate, as a PEG below 1.0 typically indicates undervaluation.
PE
16.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 6x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
30.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Goldman's negative free cash flow of -$41.9B over the trailing twelve months is a significant concern, as it indicates the company is consuming cash despite strong earnings. The high debt-to-equity ratio of 4.88 amplifies vulnerability to rising interest rates, with Q2 2026 interest expense of $18.1B consuming a large portion of operating income. Revenue concentration in trading and investment banking (over 70% of revenue) makes earnings volatile and dependent on market conditions. Market & Competitive Risks: The stock's beta of 1.29 implies 29% higher volatility than the market, making it sensitive to macro shocks. Recent news of a Fed pivot toward rate hikes could trigger a 10%+ drawdown in financials. The analyst consensus 'hold' and average target implying -5.4% downside suggest limited upside potential. Competitive pressure from other bulge-bracket banks and the shift to passive investing could erode market share. Worst-Case Scenario: A severe downturn in capital markets, combined with a credit crunch, could cause Goldman's trading and investment banking revenues to plummet. In such a scenario, the stock could fall to its 52-week low of $691.30, representing a -40% decline from the current price of $1,152.07. This would be consistent with the analyst low target of $730 and historical max drawdown of -19.84% (though worse in a crisis).
FAQ
The key risks are: 1) Financial: Negative free cash flow of -$41.9B and high debt-to-equity of 4.88, making the company vulnerable to rising interest rates. 2) Market: The stock's beta of 1.29 amplifies downside in a market downturn, and the analyst consensus 'hold' suggests limited upside. 3) Macro: A Fed rate hike cycle could reduce trading and investment banking revenues. 4) Company-specific: Revenue concentration in capital markets makes earnings volatile. The most severe risk is a -40% decline to the 52-week low of $691.30 in a bear case.
The 12-month outlook is mixed: the base case (50% probability) sees the stock trading between $1,000 and $1,150, near the analyst average target of $1,090. The bull case (25% probability) targets $1,200-$1,325, driven by sustained strong earnings. The bear case (25% probability) sees a decline to $730-$900, triggered by a market downturn. The most likely scenario is the base case, with moderate growth and stable valuation. Key assumptions include continued capital markets activity and stable interest rates.
GS's trailing P/E of 16.9x is near the middle of its 5-year range (6x-26x), suggesting fair valuation. The forward P/E of 16.3x implies modest earnings growth expectations. Compared to the capital markets industry average P/E of ~15x, GS trades at a slight premium, likely justified by its dominant market position and 22.9% revenue growth. The PEG ratio of 0.65 indicates the stock is undervalued relative to its growth rate. Overall, GS appears fairly valued with a slight growth premium.
Goldman Sachs is a high-quality franchise with strong earnings momentum, but the stock is near all-time highs and the average analyst target implies -5.4% downside. The PEG ratio of 0.65 suggests undervaluation relative to growth, but negative free cash flow of -$41.9B and a high debt-to-equity ratio of 4.88 are concerns. For long-term investors with a 3-5 year horizon, GS could be a good buy on pullbacks, especially if the stock falls to $1,000 or below. Short-term traders may find limited upside from current levels.
GS is more suitable for long-term investment (3-5 years) given its cyclical nature and beta of 1.29. The stock has strong earnings growth and a low PEG ratio, but near-term upside is limited by its proximity to all-time highs. Short-term traders may find opportunities during earnings volatility, but the stock's high volatility (beta 1.29) and analyst hold rating suggest caution. The dividend yield of 1.92% provides some income, but the payout ratio of 30.7% indicates room for growth. A minimum holding period of 3 years is recommended to ride out market cycles.
